Western Telecommunications Alliance 2005 Annual Conference

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Western Telecommunications Alliance 2005 Annual
Conference

• Promoting Broadband Deployment Across America
• Michael D. Gallagher
• Assistant Secretary for Communications and
  Information
• National Telecommunications and Information
  Administration
• U.S. Department of Commerce
• www.ntia.doc.gov
• Phoenix, Arizona
• November 7, 2005

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The National Telecommunications and Information
Administration (NTIA)

• Principal advisor to the President on
  telecommunications and information policy issues
• Represent the Executive Branch in international
  domestic telecommunications policy activities
• Manage Federal Government use of frequency
  spectrum
• Perform telecommunications research and
  engineering for both the Federal Government and
  the private sector

- BASED ON THE TELECOMMUNICATIONS AUTHORIZATION
ACT OF 1992
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Overarching GoalPromoting Economic Growth

• Thanks to the Presidents policies, Americas
  economy is strong
• GDP grew a strong 3.8 in 3Q 2005, and grew 3.6
  during the past 4 quarters, above the averages of
  each of the past 3 decades. EU25 GDP has grown
  1.3 during the past 4 quarters.
• The markets have added approximately 4.4
  trillion in new wealth since January 2003.
• Nearly 2.2 million jobs have been created over
  the past 12 months and 1.5 million since January
  2001. Over 4.2 million have been added since May
  2003.
• From December 2000 to December 2004, productivity
  grew at its fastest 4-year rate in over 50 years.
• Manufacturing activity (ISM index) has been
  growing for 28 straight months.
• National homeownership was 68.6 in 2Q 2005, near
  its record high of 69.2 in 4Q 2004.

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The Presidents Broadband Vision

• This country needs a national goal for
  broadband technology . . . universal, affordable
  access for broadband technology by 2007.
  President George W. Bush,
  Albuquerque, NM, March 26, 2004

President Bush speaking at the U.S. Department of
Commerce June 24, 2004

• Governments Role
• "The role of government is not to create wealth
  the role of our government is to create an
  environment in which the entrepreneur can
  flourish, in which minds can expand, in which
  technologies can reach new frontiers."
  President George W. Bush,
  Technology Agenda, November, 2002

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Creating Economic Conditions For Broadband
Deployment

• We ought not to tax access to broadband. If you
  want something to flourish, dont tax it.
  President George W. Bush in Baltimore, Maryland
  on April 27, 2004
• Tax relief has given businesses powerful
  incentives to invest in broadband technology
• Accelerated depreciation for capital-intensive
  equipment
• Extension of the Internet tax moratorium until
  Oct. 31, 2007 support making the moratorium
  permanent
• An 18-month extension of the research and
  experimentation tax credit support making it
  permanent
• President's FY 2006 budget requests a record 132
  billion for research and development.

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Benefits of Broadband

• Broadband will not only help industry, itll
  help the quality of life of our citizens.
  President George W. Bush, Dept. of Commerce, June
  24, 2004
• Tele-Medicine
• Distance Learning
• Tele-Work
• National Security
• Jobs and Economic Growth
• The wireless industry is poised to create up to 3
  million jobs and save 600 billion over 10 years,
  according to a new report from Ovum for CTIA.
  About 2.5 of all jobs in the US now depend on
  the wireless industry, according to the Ovum
  report. (Source TechDaily, 10/3/05)
• U.S. Chamber of Commerce study released 10/6/04
  found more than 212,000 new jobs would be created
  and 127 billion a year would be added to GDP
  over the next five years if telecom regulations
  were overhauled.

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U.S. Telecom Market Continues to Lead the World
2004 Total 784.5 Billion (7.9 growth over
2003) One-third of the Global Telecom Market
Source TIAs 2004 and 2005 Telecommunications
Market Review and Forecast
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Removing the Regulatory Underbrush

• The Administration supports the FCCs order
  freeing newly deployed broadband infrastructure
  from legacy regulation.
• As a result ? the number of communities with
  fiber build outs has increased 83 from 217
  communities to 398 communities in 43 states. The
  number of homes passed by fiber grew from 970,000
  in October 04 to 1.6 million in April 05. Many
  of the communities are outside the big cities.
  (Source FOCUS, FTTH Council and TIA, 5/10/05)
• Improving Access to Rights-of-Way
• Broadband providers have trouble getting
  across federal landsthats why I signed an order
  to reduce the regulatory red tape for laying
  fiberoptic cables and putting up transmission
  towers on federal lands.
  President George W. Bush, U.S. Department of
  Commerce, June 24, 2004
• On April 26, 2004, the President signed an
  executive memorandum directing federal agencies
  to implement recommendations set out by the
  Federal Rights-of-Way Working Group. They called
  for improvements in 1) Information Access and
  Collection, 2) Timely Processing, 3) Fees and
  Other Charges, and 4) Compliance.

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Presidents Spectrum Policy Initiative

• The existing legal and policy framework for
  spectrum management has not kept pace with the
  dramatic changes in technology and spectrum use.
• - President George W. Bush, Presidential
  Memorandum, May 29, 2003
• Committed the Administration to develop a
  comprehensive U.S. spectrum policy for the 21st
  century.
• The Secretary of Commerce was charged to lead
  this initiative.
• Established a Federal Government Spectrum Task
  Force membership includes the Departments of
  State, Treasury, Defense, Justice, Interior,
  Agriculture, Transportation, Energy, Homeland
  Security, and NASA, OMB, OSTP and Project
  SAFECOM.

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Moore Meets Marconi Wireless Broadband and New
Technologies
The other promising new broadband technology is
wireless. The spectrum that allows for wireless
technology is a limited resource . . . and a
wise use of that spectrum is to help our economy
grow, and help with the quality of life of our
people. -- President George W. Bush, June 24,
2004
The Administration has made more radio spectrum
available for wireless broadband technologies

• Advanced Wireless Services (3G)
• Ultra-wideband
• 5 GHz Spectrum
• 70/80/90 GHz

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U.S. Population Online
Source PFF, The Digital Economy Fact Book,
Seventh Edition 2005
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Source FCC
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Source FCC
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Trends in Technology Adoption

• A study released Oct. 17, 2005 by USA TODAY and
  Claritas marketing research firm showed that
  income is not the driving factor for technology
  adoption, rather it is a lifestyle or societal
  movement. The study found that in a
  county-by-county survey 29 of U.S. households
  are likely to be early adopters of technology
• Four of the 25 counties that contain the highest
  percentage of tech-centric households are in
  Colorado (Denver region)
• Six counties in Northern VA-DC-Baltimore corridor
  
• Three counties in Utah (Salt Lake City/Provo
  region)
• Also among the top 25 are counties in Iowa,
  Kentucky, Minnesota, Michigan and Texas.
• The study looked at the percentage of ALL
  households in the county, which accounts for why
  Santa Clara, part of Silicon Valley, ranks 149 on
  the list the county is big and contains a large
  non-Silicon Valley population.

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Promising Technology Solutions to the Rural
Challenge

• Wi-Fi Rural Oregon is home to the worlds
  largest Wi-Fi hotspot ? 700 miles2 Airgo Networks
  announced plans to sell Wi-Fi chips with data
  rates up to 240 Mbps by 4th quarter 2005 4x the
  speed of current Wi-Fi chips at 54 Mpbs.
• WiMAX With a range of up to 40 miles, WiMAX
  may be a promising solution for delivering
  broadband to rural areas. Although WiMAX is
  still under development, the FCC and FEMA
  authorized deployment of a WiMAX network (15 mile
  range with 45 Mbps bandwidth 30x faster than
  standard 1.5 Mbps DSL connections) to link Wi-Fi
  hotspots in an effort to restore communications
  damaged by hurricane Katrina.
• BPL Manassas , VA -- a suburb of Washington,
  DC recently deployed the nation's first
  citywide broadband-over-power-line (BPL) system
  and is available to about 10,000 of the city's
  12,500 homes. Central VA Coop, a rural
  cooperative, also is developing a BPL network in
  that state.
• WISPs Wireless Internet service providers,
  approximately 3,000 in the U.S., traditionally
  provide broadband connectivity in areas not
  reached by cable or DSL. Now WISPs are expanding
  into urban areas.

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Promising Technology Solutions to the Rural
Challenge (contd)

• Unlicensed Mesh Networking By linking nodes on
  an ad hoc basis, mesh technology promises to
  deliver high bandwidth at an order of magnitude
  lower cost than existing licensed wireless
  technologies. Mesh architecture permits the
  extension of wireless coverage to areas that do
  not have wire infrastructure, and can link
  diverse devices or networks. Champaign-Urbana
  Community Wireless Network (CUWin) in Illinois
  has offered free 1.5 Mbps Internet access on a
  mesh network since 2002. The network can
  support 50-100 simultaneous users with three
  high-capacity T-1 wires that connect to the
  Internet. Speeds are comparable to 50/month
  ISP subscription.
• Satellite Satellites have long held potential
  for communications coverage of large, sparsely
  populated areas. Hughes-owned DirecWay counts
  250,000 subscribers Denver-based WildBlue
  launched a similar service in June 2005.

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Broadband Over Power Lines The Third Wire

• We need to get broadband to more Americans .
  . . one great opportunity is to spread broadband
  throughout America via our power lines.
  President George W. Bush, US Department of
  Commerce, June 24, 2004
• The FCC began a BPL rulemaking on February 12,
  2004.
• Principal concern was the risk that BPL systems
  might interfere with radio communications.
• NTIA submitted to the FCC a Phase 1 study that
  defined interference risks and potential
  mitigations (April 2004).
• Based on additional analyses, NTIA recommended
  several supplements to the FCC proposed BPL rules
  to reduce risk of BPL interference (June 2004)
• The FCC adopted rules incorporating most NTIA
  recommendations on October 14, 2004.
• Today, many utilities, hotel operators and others
  are deploying experimental and operational BPL
  systems.

HomePlug Modem can turn an electrical outlet into
an Internet connection.
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Broadband Over Power Lines Current Deployments
Source UPLC 2005
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Universal Service Fund
Source FCC, Trends in Telephone Service, data
as of April 2005
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Commerce Departments Economic Development
Administration (EDA) Supports Technology

• EDA, the only federal entity with domestic
  economic development as its sole purpose,
  provides assistance to rural and urban areas for
  economic development and revitalization.
• EDA manages a 2 billion portfolio and EDA grants
  maximize private sector investment per federal
  dollar input. Over the past four years, EDA has
  increased private sector investment from 9 per
  EDA 1 to an average of 44 per EDA 1.
• EDA grants are focused on locally-developed,
  regionally-based economic development initiatives
  that achieve high return on taxpayers
  investment, create higher-skilled, higher-wage
  jobs, and directly contribute to economic growth.
• The Presidents Strengthening Americas
  Communities Initiative will consolidate 18
  existing federal economic and community
  development programs, including EDA. The
  Administrations proposed FY 2006 budget focuses
  on robust funding for this Initiative. As a
  result, no funds are proposed for EDA grant
  programs in the 2006 budget.

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EDA Investment in Broadband Deployment

• EDA supports the proliferation of broadband
  networks as a key priority for regional economic
  growth.
• Recent investment examples
• Arizona 2.3 million to Hopi Tribe to build a
  broadband Internet system
• Utah 2.5 million to Utah State University for
  telecommunications and IT network
• Idaho 2 million to Gem County for broadband
  deployment in regional industrial park
• Alaska 2.1 million to City of Ketchikan for
  Ketchikan Public Utilitys telecom transmission
  lines
• EDAs overall national investment budget is
  approximately 224 million for FY05 and EDA
  grants are highly competitive.
• EDA encourages communities eligible for specific
  broadband programs, such as those offered by
  USDAs Rural Utility Service, to access those
  programs before applying for EDA investment
  dollars.

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USDA Rural DevelopmentRural Utilities Service
(RUS) Broadband Programs

• RUS Broadband Loan Program
• During FY 2005, no less than 2.157 billion will
  be made available for loans and loan guarantees
  for the construction, improvement, and
  acquisition of facilities and equipment for
  broadband service in eligible rural communities.
  As of 9/30/05
• Received 154 applications for 2,110,788,832
  Billion
• Approved 49 for 780,879,931 Million
• Processing 13 for 162,292,883 Million
• 35 loans totaling 412,462,931 have been approved
  for projects located west of the Mississippi
  River.
• RUS Community Connect Broadband Grant Program
• 9 Million in grant funds available on a
  competitive basis to provide first-time broadband
  in rural communities. Recent grant awards
  include
• 565,963 to the Pueblo of San Juan, NM to connect
  12 community facilities and 90 tribal residences
• 393,309 to the City of Timber Lake, SD to
  connect schools, libraries, public buildings,
  public safety

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USDA Rural DevelopmentRUS Distance Learning and
Telemedicine (DLT) Program

• DLT loans, grants, and loan-grant combinations
  provide funding for distance learning and
  telemedicine networks to enhance opportunities in
  rural areas.
• Funding of up to 500,000 goes towards equipment
  (e.g., desktop computers and labs), as well as
  training and infrastructure.
• Funds available for FY 2005
• Grants 20.8 million
• Loans 9.6 million
• Combination Loan-Grants 44 million
• Application deadline for FY 2005 funds was
  February 1, check http//www.usda.gov/rus/telecom/
  dlt/dlt.htm for details on the next grant cycle
• 2004 DLT grants to WTA members states include
• 500,000 education grant to Arizona Western
  College
• 422,278 medical grant to Wayne County Hospital
  in Iowa

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Conclusion

• The President has a vision for making advanced
  technologies available to all Americans by
  creating the economic and regulatory environment
  to enhance competition and promote innovation.
• The telecom sector is growing dynamically, and
  many new technologies particularly wireless in
  nature show great potential for expanding
  broadband deployment in rural communities.
• The Presidents goal will ensure that all
  Americans have the personal and economic benefits
  of high-speed Internet applications and services.